Wrigley, Mars Reveal Some Terms of Deal
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Chicago's Wm. Wrigley Jr. Co. and McLean candy giant Mars gave anyone interested in their $23 billion merger something to chew on last week.
Wrigley filed a preliminary proxy with the Securities and Exchange Commission revealing some terms of the proposed deal, including in-house estimates of projected sales. But the famously private Mars revealed little.
Highlights from the proxy:
· It's Mars or bust: Wrigley clearly was worried that walking away from the Mars bid could hurt the company and perhaps even lead to employee loss.
Referring to an April 11 meeting between Wrigley Chairman William Wrigley Jr. and Mars President Paul S. Michaels and Mars Chief Financial Officer Olivier C. Goudet, the proxy states:
"Messrs. Michaels and Goudet also said that this was a friendly proposal to be discussed on an exclusive basis and that Mars would withdraw its proposal if the board of directors of the company was not interested in pursuing the combination or if the company wanted to conduct any type of auction process."
The Wrigley board believed that Mars wasn't bluffing.
When listing reasons for the merger, Wrigley writes: "the likelihood that, in our board of directors' view, conducting an auction process before approving the merger would result in the withdrawal of Mars' proposal and would be detrimental to Wrigley by posing significant risks to our existing operations, including risks related to employee retention."
· Mars ups bid: Mars offered Wrigley $76 per share on April 12, which Wrigley said was too low. Five days later, Mars raised its bid to $77 per share. After completing due diligence on Wrigley, Mars made its final offer of $80 per share, which Wrigley accepted. The deal was announced on April 28.
